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      What Lies Behind Turkey’s Withdrawal From the Istanbul Convention?

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      Turkish President Recep Tayyip Erdogan issued a decree in the early hours of March 20 withdrawing Turkey from the Council of Europe treaty — dubbed the Istanbul Convention — on preventing and combating violence against women and domestic violence. The convention sets comprehensive standards for protecting women against all forms of violence.

      The withdrawal prompted widespread protests from women’s groups and an uproar on social media, criticizing that it signals a huge setback for women’s rights in a country with high rates of gender-based violence and femicides. Just in 2020, at least 300 women were murdered in Turkey.

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      Following the public outrage over the withdrawal, government representatives unconvincingly responded that women’s rights are guaranteed in national laws and that there is no need for international laws. The Directorate of Communications defended the decision with the claim that the convention was “hijacked by a group of people attempting to normalize homosexuality,” and that this is incompatible with the country’s social and family values.

      Turkey was the first state to ratify the Istanbul Convention and became the first to pull out. What lies behind the withdrawal?

      Erdogan’s Rationale: To Remain in Power at All Costs

      In August 2020, officials in the Justice and Development Party (AKP) signaled that Turkey was considering withdrawing from the Istanbul Convention after religious conservatives began an intense lobbying effort against the convention, lambasting it for damaging “traditional Turkish family values.” Although they claimed that the treaty destroys families and promotes homosexuality, conservative women’s groups supporting the AKP defended it. The row even reached Erdogan’s own family, with two of his children becoming involved in groups on either side of the debate. Due to these internal tensions within the AKP and the symbolic achievement with the reconversion of the Hagia Sophia into a mosque in 2020, the debate was postponed.

      Although opinion polls had shown that 84% of Turks opposed withdrawing from the Istanbul Convention and a majority of conservative women were in favor of it, Erdogan decided to pull out of the treaty, thereby disregarding not only the international law anchored in the constitution, but also the legislative power of parliament. This move comes amid significantly eroding support for the president and his informal alliance with the ultra-nationalist Nationalist Action Party (MHP). The withdrawal from the convention gives Erdogan three political advantages that will help him retain power.

      Embed from Getty Images

      First, Erdogan and his AKP aim to reenergize their conservative voter base, which has been dissatisfied with the economic downturn — a reality that has only been exacerbated by the coronavirus pandemic. The ruling AKP government cannot curb the high level of inflation, and unemployment and poverty rates remain high. Leaving the convention is a symbolic gesture to his base, but it will bring short-term relief, as did the reconversion of the Hagia Sophia.

      Second, with a potential electoral defeat in mind, Erdogan is looking for new allies. He thus made an overture in January to the Islamist Felicity Party (SP), which is in an oppositional alliance with secularist, nationalist and conservative parties. With its 2.5% of the vote in the 2018 parliamentary elections, the SP shares the same Islamist roots as the AKP and is popular among ultraconservative voters, who enthusiastically back the withdrawal from the Istanbul Convention.

      In his meeting with the SP, Erdogan used the withdrawal as a bargaining chip for a possible electoral alliance in the future. He is not only aiming to strengthen his own voting bloc, but also to break the oppositional alliance, which has increasingly gained confidence since its success in the 2019 local elections and been effective in challenging Erdogan’s increasingly authoritarian rule.

      Third, to bolster his image as a willful leader, the Turkish president has intensified the level of repression by suppressing democratic civil society organizations that dare to challenge his rule. This time, he has targeted women’s rights advocates, who frequently criticize the government for not strictly implementing the protective measures of the Istanbul Convention.

      Political Conditionality as a Necessary European Reaction

      While increasing the level of repression in domestic politics, Turkey intensified its diplomatic charm offensive to reset Turkish relations with the European Union. Against this background, Brussels should not only condemn the decision, but also revise its EU-Turkey agenda by imposing political conditions regarding human rights and the rule of law, which have once again been breached with Ankara’s withdrawal from the convention.

      This approach is necessary for two reasons. First, the EU can send a motivating message to democratic segments of civil society and the opposition by underlining that the Istanbul Convention is an issue of human rights and that its sole purpose is protecting women from violence rather than undermining Turkey’s national values and traditions. Second, calling Ankara out is also in Europe’s own interest. The withdrawal can have spillover effects on other member states of the Council of Europe.

      Considering the latest attempts by the Polish government to replace the Istanbul Convention with an alternative “family-based” treaty that also finds support in other Central European governments, the backlash against women’s rights in Europe is not a myth, but rather a reality.

      *[This article was originally published by the German Institute for International and Security Affairs (SWP), which advises the German government and Bundestag on all questions related to foreign and security policy.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      The Loneliness of Matt Gaetz

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      Representative Matt Gaetz, a brash Trump loyalist, was apparently proud of his reputation as “the most despicable member of Congress.” He presented it as a badge of honor that his electorate would appreciate thanks to the low esteem in which the general population holds Congress. But now with documented reasons for finding him despicable, not just in the eyes of fellow legislators, but of the law itself, his pride is likely to be tempered.

      The Gaetz scandal combines several key features of the best hyperreal political narratives prized by the media. Gaetz’s rare talent for obsessively associating a taste for power, money and alleged underage sex has catapulted him into the equivalent of a political version of Jeffrey Epstein, though with fewer friends among the wealthy and famous.

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      Back in 2016, many people assumed that Donald Trump’s brashness, impudence, narcissism and specific sins revolving around money and sex would turn the Republican Party against him. The party stalwarts not only despised Trump for his personality but saw him as a threat to the moral integrity of the GOP. To everyone’s surprise, Trump’s ability to draw crowds and votes endowed him with an authority his character, political ignorance and insufferable manners seemed to preclude. The old guard did its damnedest to marginalize him, but he ended up marginalizing them when he waltzed through the presidential primaries and then defeated Hillary Clinton in the November election.

      Gaetz was undoubtedly inspired by Trump’s example. Alas, he lacked the presence, charisma and showmanship to do what Trump does best: humiliate his opponents and critics to the point of earning their grudging respect. As a result, Gaetz finds himself in no man’s land. The Guardian describes his plight in these terms: “The Florida Republican congressman Matt Gaetz appears increasingly politically isolated amid a spiralling scandal over a federal sex-trafficking investigation.”

      Giovanni Russonello at The New York Times underlines the point, calling Gaetz “increasingly isolated.” He cites the fact that few “Republicans have spoken up in support of him, and today his own communications director, Luke Ball, resigned.”

      Today’s Daily Devil’s Dictionary definition:

      Isolated:

      Excluded from the company of those who share the same interests, profit from the same situation, adhere to the same general values and who, in normal times, have no difficulty accepting and even encouraging egregiously antisocial behavior until such time as that behavior becomes known to the public

      Contextual Note

      Gaetz’s colleagues in Congress were well aware of his proclivities. Russonello reports that “Gaetz had a history of showing off nude photos and videos of women that he said he’d slept with to colleagues on the House floor.” In all likelihood, they suspected that he would be skillful enough to avoid crossing the red line that lies between ostentatiously flaunting his sexual prowess and, according to reports, engaging in sex trafficking. But ordinary political prudence wasn’t among Gaetz’s skills. He “had a reputation among colleagues for aberrant behavior, including a fondness for illicit drugs and younger women — and members of his own party had learned to keep their distance.”

      Embed from Getty Images

      What the idea of keeping their distance entails is unclear. Is it embarrassed tolerance or a form of envious complicity? Does it mean they politely giggled and applauded him for his prowess when he showed them pornographic videos? Or did they shied away from contact with him for fear of being contaminated by his obsessions?

      All politicians are attracted to power, but most are just happy to be part of the power structure. In the quest for power, those who participate in the game as members of the club without seeking to exercise real power themselves learn to accept and tolerate the obvious foibles of those whose assertiveness establishes the kind of reputation Gaetz had as “a rising star” in his party. Of course, the notion of rising star means little more than showing a capacity to generate earned media.

      In a curious parallel, a New York Times article on Noah Green, the suspect behind the recent attack on police on Capitol Hill, recounts that “by late March, after a bruising pandemic year that friends and family said left him isolated and mentally unmoored, Green’s life appeared increasingly to revolve around the Nation of Islam and its leader Louis Farrakhan, who has repeatedly promoted anti-Semitism.” The idea of being isolated has become inseparable from the idea of being “mentally unmoored.”

      During the 20th century, the US created the world’s first national culture focused almost exclusively on the idea of the atomistic individual self. It traces its origins back to Ralph Waldo Emerson’s moral concept of self-reliance. It stresses belief in the authenticity of a pure ego whose vocation is to assert itself in a competitive world. This became the key to developing the consumer society. It implied that each of us projects a unique self into the world through the choices we make. Some are consumer choices, items we buy. Some are identity choices, the characteristics of personality we want people to notice. In the end, all our choices coalesce to assert an individual presence that seeks to secure power and territory in competition with others. This self thrives with the permanent risk of becoming isolated by its uniqueness.

      With the ever-increasing role of the media, the trend of the self applied to politics has produced personalities like Trump and Gaetz and, in a different vein, Bill Clinton and Barack Obama. They all believe they are authorized to do anything that fits with the image they have created for themselves as wielders of power, from approving kill lists, like Obama, to variations on sexual predation. Their individual ambitions may be very different and the acts they engage in highly contrasted. The most disciplined avoid the obvious traits of narcissism. Others, like Trump, cultivate it. They all seek specific ways of projecting to the public the reality of their personal power.

      Historical Note

      History tells us that banal sexual indiscretions and even extravagant high jinks among political leaders — from emperors and kings to presidents and prime ministers — are the norm rather than the exception. This is true even in nations that call themselves a “city on the hill” and proclaim their adherence to puritanical values. Some are more inclined than others to put their proclivities on display. Donald Trump demonstrated that for a significant cross-section of the US population, the fantasized ideal of the dominant, conquering male complemented by the symbolism of the submissive female has remained a stable fixture of the culture. Its persistence across the culture helps to explain the extreme virulence of some feminist voices, who see all males as an enemy to their gender.

      Contrary to what extreme feminists claim, the problem is not men in general or even individuals — like Jeffrey Epstein or Matt Gaetz,  or even John F. Kennedy and Bill Clinton — who have bought into the ideology of competitive sexual conquest. They are themselves products of a culture that equates power with success in a struggle for domination. The distinction between political and social power or influence, on one hand, and an archaic sense of sexual privilege, on the other, easily breaks down in a culture that requires the self to focus at all times on competitive success. Money, property and sexual conquest appear as complementary signs of the attainment of one’s ultimate goal of self-actualization.

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      Gaetz obviously failed to understand the subtler rules of the symbolic game that managing the attributes of power requires. The pundits are now left wondering whether Gaetz can save his career, though nobody really seems to care one way or the other. Gaetz has become an object of ridicule because he sought the attributes of power before achieving power and because he failed to cultivate friends in power. But like so many people who have managed to push their fabricated identities into the willing hands of the ever-eager media, he believes he belongs among the powerful. 

      Gaetz is of course not an isolated case. But his isolation — unlike that of, say, New York Governor Andrew Cuomo, who is undergoing a similar drama — is more extreme since he foolishly focused his project on reportedly buying underage sex partners when he should have been working on buying the friendship that Cuomo and even Epstein knew how to purchase.

      *[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news. Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Obstructing Governance as a Substitute for Public Policy

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      It is hard to figure out why it seems so difficult to be a white guy in today’s America, even though I am a white guy and should be able to figure it out. The problem seems to be that there are just too many people in America who are not white guys, or even white guys and gals combined. Whenever this feeling seems to overwhelm some white guys, their solution to the perceived problem is to try to preclude something that non-white guys want: entry into the country, voting rights, equal opportunity, racial justice, access to meaningful health care and, way too often, the simple desire to live in peace or continue to live at all.

      So, now that the mass shootings have started again in earnest in America after seemingly taking a small break during the height of pandemic restrictions, it is again mostly white guys out front depriving lots of others of their lives and sense of security. Of course, who can forget the hordes of white guys storming the US Capitol a few months ago trying to prevent their fearless leader from the perceived insult of a permanent return to his beloved mansion in Florida.

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      It is worth asking who these white guys are who continue to board their trains to nowhere, callously leaving misery, destruction and even death in their wake. Some are among the really challenged people in America. Among other things, they seem to be intellectually incapable of seeing the connection between incredibly easy access to firearms and mass human slaughter in the American landscape. Find an assault weapon, and you are likely to find a challenged white guy.

      However, those white guys fueling the nation’s resistance to humane immigration policies, to easy access to the polls to affect democratic change, to a racial reckoning and equal opportunity, to universal access to meaningful health care, and even to a comprehensive public health response to the pandemic are all on the same trains to nowhere, along with their gun nut buddies. Tragically, they enable America to fail and they empower each other to add critical mass to their efforts.

      Many of these white people live in neighborhoods with a lot of other white people, only some of whom share their views. Some live in more diverse neighborhoods or pockets of poverty where they often hide their views until, for some reason, they have had enough of “others” and snap. But a whole bunch of these white people were among the 74 million people who voted for Trump in the last election.

      Thwarting Efforts to Govern

      Worse yet, they and their Republican cohorts are now determined to thwart any Biden administration effort to govern. Governing is not the same thing as being a government. Governing is, in its most basic sense, the exercise of authority thru the making of policy and the administration of that policy. President Joe Biden often has the authority to act, but to exercise that authority within America’s constitutional framework requires collaboration with, and the cooperation of, other institutional elements of that framework.

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      Take immigration policy as an example, since there is often talk of “comprehensive immigration reform.” The Biden administration can determine policy and administer elements of that policy through executive action. It can humanely allow Latino children to enter the United States and then make sure that they have a bed, a blanket and enough food to sustain them. After that, figuring out how these immigrant minors should be processed and treated becomes much more complicated, unless it is viewed as a component of a much larger US immigration problem that requires “comprehensive reform.”

      Enter Congress, enter the Republicans in Congress, enter the white guys on the trains to nowhere and that comprehensive reform is almost certainly doomed. So, what happens to the children? With some luck, they disappear into the fabric of the world of undocumented immigrants striving to find a place in a nation where a lot of white guys don’t want them to be.

      Although the immigration example is bad enough, there is more bad news from the white guys on the trains to nowhere. They don’t seem to want anybody but themselves to have a go at voting. It would be nice to say that this effort will fail in that exceptional “model democracy” known as America. But hold on, the white guys have a plan: You change the voting rules to get better results. This is easier than changing the policies, programs and personalities that many of the voters rejected under the old rules.

      Just to make sure that nobody mistook the latest white guy effort at voter suppression for a serious effort to make voting easier, those wacky Republicans in the Georgia legislature, aided and abetted by the Republican governor, just criminalized providing food and water to their fellow citizens waiting in voting lines. That is, of course, only part of what they did, but enough to fully demonstrate the lengths to which the white guys on the trains to nowhere will go to preserve their shrinking political influence.

      You see, prior voting practices in Georgia often left voters of color waiting in longer lines than their white counterparts, so instead of legislating to reduce wait times for everybody, someone came up with the bright idea of making it harder to wait in line. (This plan will work even better if the white guys also make it a crime to sell those little cooler bags to anyone who isn’t a white guy.)

      The Key That Unlocks the Door

      I wish I were making this up, but I am not. The Biden administration’s capacity to govern is being challenged not by people who have a sincere agenda of constructive reform for the nation, but by those same kind of white guys on their trains to nowhere who have just criminalized giving grandma a drink of water while she waits in line to vote.

      Even some things as potentially lifesaving for white guys as wearing masks and seeking COVID-19 vaccines seem challenging to way too many of them. While they should overwhelmingly embrace these measures if for no other reason than if only people of color get vaccinated and white guys die off, their situation gets even more desperate. Yet the world has watched while many white guys on their trains to nowhere have overtly contributed to tens of thousands of COVID deaths in the US and continue to try to thwart coordinated government efforts to address the nation’s pandemic and public health crisis.

      For some reason, even their significant contribution to the deaths of so many has failed to pause the white guys on their trains to nowhere long enough to stand back so that those of good will in government have the space they need to function and the support they need to govern.

      For as long as the mindless obstruction continues, the nation’s governmental institutions will be significantly impeded from pursuing the long-delayed promise of a more just and equitable America. And it will be that much harder to demonstrate that good government is the key that unlocks the door.

      *[This article was co-published on the author’s blog, Hard Left Turn.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Escaping Thucydides’ Trap: Keeping the Peace Between Rising and Reigning Powers

      by

      A conflict between the United States and China seems increasingly likely. A trade war that began several years ago has had economic repercussions for both sides. In the South China Sea, Chinese aggression against Taiwan is checked by the US military. In cybersphere, the war has already begun, as American and Chinese hackers attempt to exploit weaknesses in each other’s online defenses for military, political and economic information.

      With this ever-increasing antagonism between China and the US playing out on the world stage, little imagination is required to appreciate the catastrophic result of a conflict between the world’s two largest economies with nuclear triads.

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      Several years ago, Dr. Graham Allison of Harvard University unveiled a historical pattern where increasing tensions between rising and reigning states led to diplomatic friction and war. Allison dubbed this pattern Thucydides’ Trap, in honor of the Athenian strategos who identified “the growth of the Athenian power, which [put] the Lacedaemonians into fear” as a cause of the Peloponnesian War between 431 and 404 BC. Allison identified 16 cases throughout history in which the rise of a rival state provoked a response from an existing hegemonic power. In 12 of those cases, titanic wars followed, while peace prevailed in only four.

      So, what lessons do the four cases with a peaceful ending offer when considering the nascent Sino-American rivalry? Close examination reveals that military, economic and political considerations contributed to a diplomatic decision for peace. In every case, both sides were vulnerable to substantial military losses in terms of personnel and equipment. The winner of the contest would find economic gains that paled in comparison to what they could have achieved in peacetime, and the loser could expect nothing short of economic devastation. Likewise, winning these conflicts could leave the victor weakened politically and almost certainly lead to the deposition of the loser. Victory in each case would have been Pyrrhic in human, economic and political terms. Defeat would have been near annihilation.

      Thus, the four cases in which adversaries escaped the trap provide potential avenues for China and the US to do the same.  

      Spain vs. Portugal

      In the late 15th century, the Iberian Peninsula held two of Europe’s economic and military powerhouses: Spain and Portugal. In Portugal, the reign of Henry the Navigator ushered in a period of exploration and colonization in Africa. Through a combination of squeezing out rivals and occupying key positions in the Eastern Atlantic, Portugal was able to utilize important sea lanes to facilitate trade with western Africa. However, the War of Castilian Succession between 1475 and 1479 ended with a unified Castille and Aragon, greatly shifting the balance of power by creating a unified Spain.

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      After the Reconquista ended with the capture of Granada in 1492, Portugal’s trading empire was exposed to a newly united Spain. Flush with captured Muslim treasure and in possession of an experienced military, Ferdinand and Isabella needed only to look west to find targets for future expansion. Later that year, the discovery of the Americas and the potential for economic dominance over two continents made war even more likely. Yet Spain and Portugal were able to negotiate the Treaty of Tordesillas in 1494. In doing so, they averted a potentially brutal military conflict.

      Subsequently, Spain and Portugal concentrated their militaries and economic might into their colonial empires. Spanish colonies in Latin America and the Pacific created a colonial empire that only crested in the 18th century. Portugal’s possessions in Brazil, Africa, India and the Far East allowed it to access spice markets, and it generated a Portuguese-Indian sea trade monopoly. Though both empires eventually faded, their shared peace allowed each of them to experience massive economic growth — albeit at the cost of the indigenous peoples they attacked and enslaved in doing so.

      The example illustrates an emphasis on foreign trade and domestic investment instead of escalation to war. As a result of their peaceful settlement of tensions and the ensuing economic boom, Spain and Portugal became more politically stable. The new Spanish monarchy consolidated its power after 1492, making its previously multifaith state into a Catholic stronghold and ensuring that the ties between Aragon and Castille were permanent. Meanwhile, spurred on by strong trade from their colonies, Portugal was able to endeavor its Renaissance.

      The United States vs. the United Kingdom

      The precipitous rise of American industrialism and the modernization of the US Navy challenged British domination of the seas at the turn of the 20th century. As American factory output, as well as iron and steel production, surged, the US built a formidable modern battle fleet of the latest capital ship designs. Consequently, the British government realized that the cost of a conflict was something it could ill afford. By the early 20th century, the first lord of the Admiralty admitted that the United States could create a larger navy than the British Empire.

      A territorial dispute over Venezuela in 1895 threatened to ignite a third Anglo-American war, creating economic panic. By 1901, the British Admiralty realized that the US Navy would soon possess the potential to outstrip the British Grand Fleet. Thanks to the Spanish-American War of 1898 and the leadership of President Theodore Roosevelt, American naval tonnage had tripled from 1900 to 1910. Britain’s ability to maintain a stronger navy than its allies was threatened by this massive growth.

      Meanwhile, Britain was also engaged in a naval race with Germany, its primary antagonist during the era. The rapid construction of the German high seas fleet with the latest armor and guns threatened the British coastline and maritime trade routes in the event of a war. Faced with two bids for naval supremacy, the UK concentrated on the German threat and ignored American naval competition. By exempting the US from the two-power standard (to have as many battleships as its next two great competitors, plus 10%), and by leaving the Roosevelt Corollary to the Monroe Doctrine unchallenged, Britain was able to deescalate the potential conflict between the two countries.

      As a result of this diplomatic and military resolution, Britain’s prudence soon netted extensive economic and national security gains. As the Great War commenced, Britain’s war economy relied increasingly on raw materials, munitions production and food supplies from the United States. This ongoing trade, coupled with Imperial Germany’s unrestricted submarine warfare and the revelation of the Zimmerman Telegram, helped propel the US into declaring war on Germany in April 1917 and thus into becoming an ally to its onetime rival. By averting a war, Britain was able to win another, one with truly disastrous consequences for European liberty had it lost.

      Although its enemies were dismembered or subjected to humiliating terms that sowed the seeds of political violence and the Second World War, the UK enjoyed a period of political continuity, which helped its victory against Nazi Germany in 1945 and led to a more gradual dissolution of the British Empire by the 1960s.

      The Soviet Union vs. the United States

      Following a joint victory in World War II, tensions rose rapidly between the United States and the Soviet Union. A 40-year rivalry and a nuclear arms race threatened the world with a mutually annihilating conflict. But despite multiple flashpoints, such as the Berlin Blockade of 1948-49 and the Cuban Missile Crisis in 1962, the Cold War never fully went hot. 

      Though the phrase “mutually assured destruction” is typically used to refer to destruction by nuclear weapons, a conflict even before both sides wielded large arsenals could have been catastrophic. The Soviet Union was savaged by the Second World War with an estimated 24 to 27 million deaths and could not afford another conflict in the immediate aftermath. Though the United States held a stronger economic position, it realized that an invasion of the Soviet Union was likely to end the same way it did for the Germans in the summer of 1941. Thus, for both sides, victory would have come at too great a cost.

      Embed from Getty Images

      Reeling from the cost of total war from 1941 to 1945, the Soviet Union quickly repaired its economy and produced notable growth consistently. Its annual gross national product (GNP) rose by 5.7% from 1950 to 1960 and 5.2% from 1960 to 1970. At the same time, the US experienced unprecedented development. This was due in part to geographic isolation from Europe during World War II, which prevented extensive damage to American industries. The inception of new industries such as television, the rise of suburbia and government investment in infrastructure helped the US economy expand continuously for decades after 1945. The resources for each nation’s respective economic success would not have been available if they had chosen to start a third world war.

      Extensive proxy wars led by the US and the Soviet Union offered glimpses of the destruction and economic hardship that would have ensued if NATO combated the Warsaw Pact. From 1955 to 1975, the United States fought a desperate containment war against insurgents in Vietnam that ended with a communist victory and the destabilization of several other countries in Southeast Asia. In Afghanistan, the Soviets spent 10 years trying to suppress the mujahadeen before their ignominious withdrawal in 1989.

      Both conflicts resulted in the US and Soviet Union suffering tens of thousands of casualties among military service members, while causing even higher death tolls among the people of Vietnam and Afghanistan. Those wars also cost the US and the Soviet Union large sums of money that could not be regenerated, prompting economic hardship. The price of these proxy wars, terrible as they were in their own right, offered a window to the horror that would have ensued if the two superpowers had gone to war.

      Eventually, the nonviolent end of the Cold War brought with it far greater political stability than a military tête-à-tête between the Americans and Soviets would have done. The new government of the Russian Federation was able to take power quickly and without international incident.

      Germany vs. the United Kingdom and France

      Following the reunification of Germany in 1990, the fear of a third world war was foremost on the mind of the British and French governments, who prepared to make an independent military alliance should Germany rearm. Understanding this fear, and with the horrors of the world wars within living memory, Germany opted against rebuilding its military to the same degree as earlier in the 20th century. The costs of the two world wars further dissuaded Germany from posturing in a way that would invite another total conflict. In this way, the Germans ensured peace for the foreseeable future in Europe. 

      As a result of decreased military tensions between the UK, France and Germany, Europe focused its energy on opening its borders and harmonizing its economic exploits. The continued expansion of the European Union and the introduction of the euro currency cemented these aims. All three partners benefited economically from this period of stability. In 2019, Germany had the largest national economy in Europe, followed closely by the UK and France, respectively. There is freedom of travel and ease of custom that furthers cultural interaction and social development, and Europeans are arguably happier, healthier and freer than they were at any previous point in history.

      Subverting the Modern Trap

      None of the four cases cited above is an exact clone of current relations between the United States and China. In both the Iberian and the American-British examples, there was a shared cultural background and a similar language between the two sides that doubtlessly contributed toward peace. During the Second World War, the US and the Soviet Union formed a military alliance that defeated Nazi Germany and Imperial Japan. By contrast, the US assisted nationalist forces during the Chinese Civil War of 1945-49 and combated Chinese communist soldiers during the Korean War of 1950-53. In the late 1980s, memories of both world wars provided Britain, France and Germany with enough incentive to resolve their issues peacefully.

      Embed from Getty Images

      This does not mean there are no similarities each side can use as a guide to peace. Economic incentives played a role in the reduction of tensions between Spain and Portugal. Similarly, ending the trade war between the US and China and resuming normal economic ties would help fill each nation’s coffers. The United States and Great Britain were able to ally before combating a single enemy. If climate change were viewed as a shared problem, the US and China could ally to combat it together.

      Finally, the US and China do not share a land border, which was also true of the US and the Soviet Union during the Cold War; this reduces the opportunity for an overzealous or nervous service member to inadvertently start a conflict. Both countries, in addition, are important members of the United Nations, which mirrors how Britain, France and Germany were important members of the European Union and NATO.

      Graham Allison’s analysis of relations between rising and reigning powers paints a grim future, one in which two powerful nations armed with nuclear weapons fight one another. To avoid such a future, the American and Chinese governments must strive to understand the lessons of the past. They must learn about the instances in which Thucydides’ Trap did not spring. Diplomacy between the two powers must always be pragmatic, and each side should understand that they will never get everything they want at the negotiating table. Finally, each side must scale down their military presence, particularly in the South China Sea, before a misstep or negligent discharge can potentially ignite a global war.

      By recognizing the devastating harm that would occur in the event of a war, and the potential for economic growth and political stability if peace is sustained, two of the world’s largest powers can concentrate on shared goals and projects for mutual benefit. This will not be easy. But, as Benjamin Franklin once observed, “There has never been a good war or a bad peace.”

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Is India’s Vaccine Diplomacy a Good Idea?

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      In terms of numbers, India ranks the third worst after the US and Brazil when it comes to COVID-19 infections. At the time of publishing, the country has recorded over 12.3 million confirmed cases and more than 163,000 deaths. The BBC reports that India is facing a “severe, intensive” second wave of the pandemic. The situation in states like Maharashtra, Gujarat and Punjab has reached alarming proportions.

      How Did India Combat COVID-19 in 2020?

      Last year, Indian Prime Minister Narendra Modi imposed a stringent lockdown that brought economic activity to a shuddering halt. This lockdown led to a dramatic contraction of India’s GDP by 23.9% in the April-June 2020 quarter. The economy recovered somewhat in later quarters, but it experienced a recession in the 2020-21 financial year for the first time in 25 years.

      Arguably, the lockdown was a success in preventing a rapid spread of COVID-19 last year. In percentage terms, India did not do too badly. After all, it has nearly 1.4 billion people in contrast to the US population of 330 million. The daily new cases in India dramatically declined until recently when the second wave hit the country. Thanks to a young population and public health measures, India experienced a remarkably low mortality rate.

      What’s Behind Chile’s Vaccination Success?

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      India has low per capita income and poor health care facilities. So, its achievement in controlling the COVID-19 outbreak has been hailed by many public health experts, including the World Health Organization (WHO). In January, India launched a massive vaccination program to fight the pandemic. This was possible because the country has a track record of mass vaccination and massive vaccine production.

      Indian manufacturers supply more than 60% of the world’s vaccines against diseases like polio and measles. Early on, the country began mass production of two COVID-19 vaccines: Covishield and Covaxin. The Serum Institute of India (SII), which partnered with the University of Oxford and AstraZeneca, had already produced and stocked approximately 70 million Covishield doses even before India granted emergency approval to their vaccine. 

      On January 16, India launched an ambitious plan to vaccinate around 300 million people by June. The world’s largest vaccination program focused first on those with high vulnerability to the coronavirus. First on the list were health care workers. They were followed by those who were 65 years or older. This ensured that the vaccine was not monopolized by the richest sections of Indian society. 

      As vaccinations have increased, the Modi government has eased restrictions in the country. Crowds have gathered at large weddings, sporting events and festival celebrations. The government lifted restrictions to stimulate economic activity. A poor country like India with a large population could not afford a lockdown for too long. However, the easing of restrictions has not only led to increased economic growth, but also rising cases of COVID-19 infections. India faces a tough balancing act between stimulating economic activity and curtailing a pandemic.

      India’s Vaccine Diplomacy

      During the pandemic, India has embarked on an ambitious foreign policy initiative. Modi announced the Vaccine Maitri initiative to supply COVID-19 vaccines to other nations only four days after India began domestic vaccinations. With the world’s largest manufacturer of vaccines, India has shipped approximately 61 million doses to 84 countries, which have included free batches. It has pledged 200 million doses for the WHO’s COVID-19 Vaccines Global Access (COVAX) initiative to ensure vaccines for 92 low and middle-income countries.

      Embed from Getty Images

      India began its vaccine diplomacy by distributing doses to its immediate neighbors: Nepal, Bangladesh, Sri Lanka and the Maldives. The country has also exported vaccines to faraway places such as the Caribbean, where the likes of Barbados, Dominica and Jamaica have benefited from Indian aid. Leaders of countries such as Brazil and Antigua and Barbuda have publicly thanked Modi for his country’s generosity.

      As per some foreign policy experts, India’s vaccine distribution is a diplomatic masterstroke. It helps the country gain goodwill and increase its soft power. It could lead to a more peaceful neighborhood. In the future, India might win much support, strengthen its claim to a permanent seat at the UN Security Council and emerge as a great world power.

      Vaccine diplomacy might be giving a rare chance to counter China, which has launched the Belt and Road Initiative to increase its global footprint. For decades, China has backed Pakistan and, for the last few years, has increased its presence in Myanmar, Bangladesh, Sri Lanka and Nepal. With Chinese influence growing in India’s closest neighbors, the country has understandably become anxious.

      In June 2020, Chinese and Indian troops engaged in a bloody hand-to-hand combat with many dying in the process. Since that clash, relations between India and China have been fraught. India has banned over 200 Chinese apps and restricted Chinese investment into the country. COVID-19 has given a unique opportunity to India — the “pharmacy of the world” — to compete with China. By shipping vaccines to low and middle-income countries, India is gaining influence at the Chinese expense whose vaccines have been questioned by Western media.

      Rich countries have failed poorer ones because they have focused on domestic programs. Unlike India, the United States, the European Union and the United Kingdom are focused completely on vaccinating their domestic populations. India’s generosity is unique and might lead to long-term gains.

      Masterstroke or Distraction?

      However, there is a counterargument that India has been premature in kicking off vaccine diplomacy. It did so before setting its own house in order. According to the Johns Hopkins Coronavirus Resource Center, as of April 2, India has administered nearly 69 million doses, fully inoculating only 9.6 million people. That is just 0.71% of its population. India’s focus should have been getting every one of its citizens vaccinated instead of basking in complimentary tweets from foreign leaders. Such goodwill might turn out to be very transient. 

      Recently, India has slowed down its vaccine exports and speeded up its vaccination program. The government has now enrolled private hospitals in its vaccination drive, and everyone above the age of 45 is now eligible for the vaccine. Modi himself got vaccinated on March 1, boosting public faith in COVID-19 vaccines and increasing their uptake nearly four-fold. It seems that the government is paying attention to its critics.

      Time will tell whether India’s vaccine diplomacy was a bold masterstroke or an unwise distraction. It reveals that there are no easy choices for any nation during a raging pandemic.

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Is the Long War Finally Ending?

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      In October 1944, with the end of World War II in sight, Winston Churchill and Joseph Stalin passed a note back and forth to each other at a conference in Moscow. On the piece of paper, Churchill had assigned percentages to several Eastern European countries. Stalin amended the numbers and Churchill agreed. The deal remained secret for nearly a decade.

      The percentages on the piece of paper referred to the amount of influence that the Soviet Union and the West would wield in Hungary, Romania, Bulgaria, Yugoslavia and Greece, with the first three countries falling in the Soviet sphere, control divided evenly in Yugoslavia, and Greece staying in the Western camp. It was the first major articulation of the geopolitical “spheres of influence” that would characterize the Cold War era.

      What an Afghan Peace Deal Could Look Like

      READ MORE

      During the first post-war elections in Eastern Europe, communist and non-communist parties vied for power, eventually cobbling together different versions of coalition governments. Ultimately, however, the communist parties seized control, except in Greece, where the West intervened in a civil war to help defeat leftist insurgents. By 1948, the region looked very much like the agreement that Churchill and Stalin had drawn up.

      The Long War

      Today, the end of a much longer war appears to be approaching. The fighting in Afghanistan has lasted nearly two decades, the most protracted conflict the United States has ever endured. This war is, in turn, part of a much larger battle that has been variously described as “America’s endless wars,” the “war on terror” or simply the “long war” that began in the wake of the attacks of September 11, 2001, though earlier skirmishes took place during the 1990s.

      The Biden administration is currently trying to negotiate a spheres-of-influence arrangement in Afghanistan that resembles what Churchill laid out in 1944. The American-backed government in Kabul, according to this proposal, would share power with the insurgent Taliban forces as an interim step until elections can be held under a new constitution.

      Embed from Getty Images

      Such a deal would make it easier for the United States to withdraw all of its 3,500 soldiers from Afghanistan by May 1, as laid out in a peace deal signed in 2020. Even if that withdrawal goes through, however, the institutional apparatus of the larger “long war” will still be operational. US forces remain in Iraq and Syria, and the Pentagon eyes the civil war in Libya with concern.

      In all, after drawdowns in Afghanistan and Iraq, about 50,000 US troops are stationed in the greater Middle East, with 7,000 mostly naval personnel in Bahrain, 13,000 soldiers in Kuwait and a roughly equal number in Qatar, 5,000 in the United Arab Emirates and several thousand in Saudi Arabia. US Special Forces are also scattered across Africa, while the United States is still conducting air operations throughout the region.

      But, as in 1944, the preliminary discussion of a power-sharing arrangement in Afghanistan suggests that the active phase of the “long war” is coming to an end. The specific US adversaries — al-Qaeda, the Islamic State and various smaller global actors — have more or less been defeated. Local groups that have battled US forces, like the Taliban, remain powerful, as do adversarial governments like Bashar al-Assad’s in Syria, but they don’t pose a threat to the US homeland. Larger geopolitical rivalries, with Russia and Iran in particular, continue to shape the conflicts in the region, but the US has already established an uneven pattern of engagement and containment with these actors.

      If history is to be replayed, the United States will wind down direct combat in favor of a tense cold war and intermittent “out-of-area” operations. The end of this “long war” against the architects of the 9/11 attacks and their supporters is long overdue. The Biden administration is eager to focus on “building back better” at home, enjoy a post-war economic expansion and beef up the US capacity to challenge China and, to a lesser extent, Russia. The administration is reassessing its military capabilities to reflect these priorities.

      All of this begs the question: Will it be possible to avoid repeating the 1945 scenario by ending the “long war” and not replacing it with a cold war?

      After promising to end the forever wars during the 2020 election campaign, President Joe Biden is eager to enjoy his own “mission accomplished” moment in Afghanistan. But that pledge comes with a couple asterisks.

      For one, Biden would like to maintain a “counterterrorism” force in Afghanistan with the permission of the Taliban. Such an agreement would parallel the arrangement in Iraq, where the government allows around 2,500 US troops to focus on suppressing any remnants of the Islamic State (as well as reining in Iran-backed paramilitaries). Second, Biden has in the past broached the possibility of moving US military bases from Afghanistan to Pakistan, where they would continue to serve their counterterrorism function. It’s not at all clear whether the Taliban or Pakistani Prime Minister Imran Khan would be enthusiastic about these options.

      At the moment, the United States is paying a relatively low price for its continued presence in Afghanistan. After last year’s peace deal, there haven’t been any US combat deaths in the country, which means that Afghanistan is basically absent from the hearts and minds of Americans. The US foreign policy community would like to preserve that status quo as long as possible, particularly given the post-withdrawal prospects of “ethnic cleansing, mass slaughter and the ultimate dismemberment of the country,” as Madiha Afzal and Michael O’Hanlon of Brookings have written. Similar arguments were made around the proposed withdrawal of the bulk of US troops from Iraq, and yet those worst-case scenarios haven’t come to pass.

      In recent days, the warnings about Afghanistan have increased. According to The New York Times:

      “American intelligence agencies have told the Biden administration that if U.S. troops leave before a power-sharing settlement is reached between the Taliban and the Afghan government, the country could fall largely under the control of the Taliban within two or three years after the withdrawal of international forces. That could potentially open the door for Al Qaeda to rebuild its strength within the country, according to American officials.”

      It doesn’t take an intelligence agency to predict that the Taliban will play a major role in any future Afghanistan, with or without a power-sharing settlement. The Taliban control about 20% of the country with as much as 85,000 full-time soldiers (though the areas under Taliban control are relatively underpopulated). At the same time, the insurgents are active over a much larger stretch — as much as 70% of the country — and are putting pressure on a number of key cities, including Kunduz in the north and Kandahar in the south.

      Embed from Getty Images

      In other words, there’s a good possibility that regardless of power-sharing arrangements, the Taliban will simply take over the country, much as the communists did throughout Eastern Europe in the late 1940s. Given the record of the Taliban’s last sojourn in power, the prospect of a reestablishment of their rule is very sobering.

      But the US has failed in two decades to defeat the Taliban with the full force of its military. Keeping a few thousand soldiers in the country is not going to change the balance of power on the ground. “The hawks argue that to leave Afghanistan is simply unthinkable until someday when they have finished winning the war,” writes Scott Horton in his new book, “Enough Already: Time to End the War on Terrorism.” “But they lost the war more than a decade ago, and no one who protested against Trump’s drawdown had a single coherent thing to say about how staying there is supposed to somehow change the reality of Taliban power in that country.”

      Won’t Afghanistan again become a safe haven for international terrorists once the US troops withdraw along with their NATO partners? For all their immersion in Islamic religion and culture, the Taliban are Pashtun nationalists interested above all in kicking out the foreigners. They’re not big fans of the Islamic State group, but they do maintain a close relationship at the moment with the 200-250 al-Qaeda militants in the country. Take NATO out of the equation, however, and that relationship will likely fray at the seams, particularly if international recognition, access to the global economy and the support of powerful neighbors like Russia and Iran depend on a verifiable divorce.

      When he proposed the two spheres of influence, Churchill was not relying on the goodwill of the Soviet state. The British leader hated Stalin and communism. He was taking a clear-eyed look at the balance of power at the time and striking what he thought was the best deal he could, even if that meant “losing” most of Eastern Europe. A power-sharing arrangement with the Taliban that “loses” Afghanistan is comparably pragmatic. But will it be accompanied by other, equally pragmatic policies to bring the long war to an end?

      The Rest of the War

      The “endless wars” are obviously not just being fought by the 3,500 troops in Afghanistan and 2,500 soldiers in Iraq. As the Bush administration transitioned to the Obama era and war fatigue began to set in, the United States shifted its focus from ground operations to an air war. In Afghanistan for instance, as the number of troops declined from a high of 100,000 in 2011, the number of airstrikes steadily increased, with a peak in terms of bombs dropped in 2018 and 2019 and a consequent rise in casualties. “The number of civilians killed by international airstrikes increased about 330 percent from 2016, the last full year of the Obama Administration, to 2019, the most recent year for which there is complete data from the United Nations,” reports Neta Crawford of the Costs of War project. Throughout the greater Middle East, the United States has launched in excess of 14,000 drone strikes, which have killed as many as 16,000 people, including several hundred children.

      Since taking office, as I note in my recent study of Biden’s take on multilateralism, the new administration has launched two airstrikes, one against Iranian targets in Syria on February 25 and the other in Iraq on February 9 against the Islamic State. The Syrian attack, in particular, has prompted a bipartisan effort in Congress to repeal the Authorizations for the Use of Military Force (passed in 1991 and 2002) in order to narrow the presidential ability to launch future airstrikes.

      Meanwhile, the administration has yet to report any drone strikes. This is in marked contrast to the strikes that Barack Obama and Donald Trump ordered almost immediately upon taking office as well as the escalation in attacks that took place in Trump’s final months. In one of its first orders, the Biden administration issued a temporary halt to any drone strikes outside of combat areas such as Afghanistan and Syria. As Charli Carpenter, an expert in the laws of war, points out:

      “Essentially what Biden is doing is he’s moving the barometer back to where it was before Trump devolved authority for drone strikes away from the executive branch and into the hands of commanders. What that means is that anytime a drone strike is envisioned, it needs to be approved by the White House. There’s going to be a much higher level of oversight and much more concern over the legal nuances of each strike. It will just make drones harder to use, and you can imagine the weaponized drones will only be used in the most extreme cases.”

      In addition to initiating a review of drone strikes, the administration has launched a probe into Special Forces operations to ascertain whether they have adhered to the Pentagon’s “law of war” requirements. In effect, the Biden administration is applying greater oversight across the range of military operations to bring them into closer compliance with international rules and regulations. Such oversight, however, does not imply the end of the endless wars.

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      For that to happen, the United States would have to dramatically shrink its global military footprint, the constellation of US bases around the world that serve as the launching pad for myriad operations. About 220,000 military and civilian personnel operate in more than 150 countries and over 800 overseas military bases. A significant chunk of the Pentagon’s $700 billion-plus budget goes toward maintaining this immense archipelago of force.

      In early February, the Biden administration also announced a Global Posture Review to assess the US. footprint. Such a review is much needed. After all, did this massive apparatus save a single one of the more than half a million Americans who have died from COVID-19? Is the Pentagon protecting the United States from climate change (or merely contributing to the problem with its own carbon emissions and its protection of overseas fossil fuel production and distribution)? And all that “forward-based defense” has done absolutely nothing to safeguard US infrastructure from cyberattacks like the SolarWinds hack (that, by the way, gained access to the emails of Trump’s cybersecurity team at the Department of Homeland Security).

      For the time being, the architects of the Global Posture Review are thinking primarily of refocusing “strategic capabilities” against China in the Far East and Russia in the Arctic. But that just replaces one set of threats with another, which will adjust the footprint without actually reducing it.

      So, let’s remember that the 3,500 American troops in Afghanistan are just the tip of the iceberg. For the United States to avoid the fate of the Titanic — also famous at one time for being immense and impregnable — it had better address the rest of the icy hazard of war.

      *[This article was originally published by FPIF.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      Fair Observer Scoop: Putin Engineered the Blockage of the Suez Canal

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      MSNBC’s star journalist Rachel Maddow was ready to break the news but hesitated when certain insiders worried that, if the accusation was not borne out by verifiable facts, the reaction might further damage the reputation of a news organization whose ratings have been plummeting for the past two months. This lapse has enabled Fair Observer to provide the scoop that Maddow was on the verge of making before being pulled back by MSNBC’s marketing department. Maddow did mention a rumor that Russia could have been involved, warning that if this could be confirmed it would be seen as “a new variation in Putin’s playbook.” But with no substantial evidence to present or names to cite, she went on to focus on the lurid details of Representative Matt Gaetz’s sex scandal.

      Credible witnesses with access to the Kremlin have revealed to The Daily Devil’s Dictionary that the sandstorm credited with disturbing the navigation of the Ever Given — the Japanese container ship that ended up blocking the Suez Canal — was the result of a covert operation by Russia’s weather modification team. Russian President Vladimir Putin’s aim was to damage the credibility of traditional trade routes, sowing doubt about the West’s ability to manage global commerce as the US prepares to disengage militarily from the Middle East. The message is clear. Russia is ready to mount similar operations in Syria, Iraq and even Egypt and Libya to further weaken the waning US influence in the region.

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      But there is another dimension of this geopolitical struggle whose implications will stretch out over decades. Thanks to global warming, which the Russians officially blame the US for encouraging, Putin has been nourishing his plan to turn the increasingly navigable Arctic Ocean that stretches across Russia’s northern coastline into the obvious choice for most East-West trade. Thanks to the melting ice, Russia will soon be in a position to monitor and control as much as 60% of intercontinental trade in the decade to come.

      Fair Observer’s scoop resulted from a cryptic remark spoken by a Russian official and overheard by CNN’s correspondent at a lunch table at the Kremlin. One of Putin’s closest aides, Nikolai Stavrogin, sat down with the intention of explaining to New York Times reporter Shawn McDermott a major shift in geopolitical history that would soon become apparent. The past, he claimed, was being undone in front of our very eyes. When asked for a detailed explanation, Stavrogin leaned back in his chair and slowly articulated this enigmatic thought: “Ice melts and ships float. It is ever a given that when water evaporates stillness reigns.”

      Today’s Daily Devil’s Dictionary definition:

      Evaporate:

      A verb used alternatively to describe the transformation of water under the effect of heat and the fate of many news stories left in the hands of journalists who refuse to think below the surface

      Contextual Note

      CNN reporter Elizabeth Prynne, who was just near enough to overhear Stavrogin utter his enigmatic statement, noted the words “ever” and “given” in his arcane message and suspected the remark might have a deeper meaning. Convinced that it needed to be followed up, she asked her colleague at The NY Times for some background. The Times reporter told her that Stavrogin’s observation concerned climate change, a purely scientific matter. He had other matters to deal with and would refer this one to his scientific colleagues, always eager to speculate about the effects of global warming.

      Prynne began asking around what Stavrogin’s remark might mean. She mentioned it to a friend who happens to be a Fair Observer contributor, who then informed The Daily Devil’s Dictionary. We immediately understood that this did indeed refer to the phenomenon of global warming. But, as Prynne suspected, it concerned the geopolitical impact of climate change. Thanks to the ever more apparent annual Arctic thaw that has opened up previously inaccessible trade routes, Russia is certain to obtain a growing strategic advantage. 

      Thanks to another of our relations, we were then able to reach Stavrogin himself who, without offering any new details, confirmed that his remarks concerned an impending revolution in maritime commerce. He also dropped the telling hint that the Kremlin’s weather experts had the knowledge and expertise to cause the stranding of an oversized ship in the Suez Canal. He refused to confirm that the operation was actually carried out by the Russians, but his boast that they were capable of such an operation left no doubt in our minds.

      Historical Note

      Fair Observer is not in the business of seeking or publishing scoops. But when one lands in our lap, we will not hesitate to disseminate it, especially at this crucial moment of history on April 1, 2021. The Daily Devil’s Dictionary published one of the first warnings concerning the suspicious disappearance of journalist Jamal Khashoggi in early October 2018. We pointed to the nature and the probable author of the crime well before the mainstream news began reporting Saudi Crown Prince Mohammed bin Salman’s possible involvement in Khashoggi’s disappearance.

      Embed from Getty Images

      We have now established the fact that Vladimir Putin effectively intervened in beaching the Ever Given, an incident that for a full week dramatically disturbed global trade by blocking the Suez Canal. This is a major story that neither MSNBC nor CNN have shown the temerity to reveal. Proud of our scoop, we find ourselves in the embarrassing position of having to backtrack on our own recent and repeated claims that The New York Times has been pathologically obsessed with blaming Russia for every crime and misdemeanor on the international stage, or even in domestic politics in the US. We hope the Gray Lady will accept our belated apologies.

      This incident that came to light through such indirect means tells us that, contrary to our own claims, The Times’ executive editor, Dean Baquet, was in the end justified in pursuing beyond reason the paper’s campaign against Russia. After what has now become clear about Putin’s intervention in the Suez Canal, what rational person could possibly doubt what The Times has been claiming for the past five years — that Putin colluded with Donald Trump and personally played the decisive role by tampering in the 2016 US presidential election to ensure the defeat of Hillary Clinton?

      It was barely a week ago that the sandstorm occurred leading to the blockage of the Suez Canal. Some will say that so soon after the event, with the facts still difficult to pin down, that this first day of April is not the appropriate time to claim the truth of such allegations. But we proudly proclaim that April 1 is a far more appropriate moment than the other 364 days of the years when MSNBC, The New York Times, CNN, The Washington Post and others have consistently pushed a similar story, and that for more than five years.

      *[Humorists have always been attracted to the temptation of reporting patently fake news on April Fools’ Day. In our turn, we have succumbed. Our apologies to MSNBC, CNN and The New York Times for doing what they would never dare to do: print news that isn’t true. As Jonathan Swift might describe it, they are the Houyhnhnms, who “cannot say a thing which is not” and we are the Yahoos, whom he describes as “restive and indocible, mischievous and malicious.” (Disclaimer: we have no legal connection to Yahoo!) Read more of The Daily Devil’s Dictionary on Fair Observer.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More

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      in World Politics

      A New European Financial Landscape Is Emerging

      by

      The United Kingdom’s exit from the European single market on January 1 has sent trade in goods plummeting amid much confusion. By contrast, Brexit was carried out in an orderly manner in the financial sector, despite significant movement of trading in shares and derivatives away from the City of London.

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      After five years of radical uncertainty, it has become clear that the European Union and the United Kingdom will be taking separate paths on financial regulations — a financial “decoupling” that means a significant loss of business for the City. Whether the EU financial sector can gain much of what London loses will depend on the EU’s willingness to embrace further financial market integration.

      Smart Sequencing Ensured an Orderly Brexit

      As with the Y2K problem, the Brexit transition could have gone worse. It took more than luck to avoid financial instability along the way.

      First, financial firms on both sides of the English Channel (and of the Irish Sea) worked hard and were able to preempt most of the operational challenges.

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      Second, despite all the recurring high-stakes drama between the UK government and the European Commission, the technical cooperation between the authorities actually in charge of financial stability, primarily the Bank of England and the European Central Bank (ECB), appears to have run smoothly.

      Third, the negotiators phased the process in a smart way. The Brexit Withdrawal Agreement of January 2020 helped reduce uncertainty by ensuring that the UK government would meet its financial obligations to the EU, avoiding what would have been akin to selective default. That agreement kept the United Kingdom in the single market during the transition period beyond the country’s formal exit from the European Union on January 31, 2020. It also set a late-June deadline for the British government to extend the transition period beyond December 31, 2020. As London decided not to do so, that left six months of effective preparation.

      To be sure, whether an EU-UK Trade and Cooperation Agreement (TCA) would be concluded remained unknown until late December. But that mattered comparatively little for financial services, since trade agreements typically do not cover them much. By one count, the 1,259-page TCA (which is still unratified by the European Union) contains only six pages relevant for the financial sector.

      The resulting legal environment for financial services between the European Union and the United Kingdom is unlikely to change much any time soon. Contrary to occasional portrayals in the United Kingdom, no bilateral negotiations on financial services are going on, except for a memorandum of understanding expected this month that is not expected to bind the parties on substance.

      From the EU perspective, the United Kingdom is now a “third country,” in other words an offshore financial center, following decades of onshore status. UK-registered financial firms have lost the right, or “passport,” to offer their services seamlessly anywhere in the EU single market. From a regulatory standpoint, they have no better access to that market than their peers in other third nations such as Japan, Singapore or the United States.

      Equivalence Status for UK Financial Market Segments

      Some segments of the financial sector in these other third countries actually have better single market access than British ones, because they are covered by a category in EU law allowing direct service provision by firms under a regulatory framework deemed “equivalent” to that in the European Union. The equivalence decision is at the European Commission’s discretion, even though it is based on a technical assessment. As a privilege and not a right, equivalence can be revoked on short notice.

      So far, the European Commission has not granted the UK any such segment-specific equivalence, except in a time-limited manner for securities depositories until mid-2021 and clearing services until mid-2022. For the moment, the commission appears to be leaning against making the latter permanent. In most other market segments, the commission will not likely grant equivalence to the United Kingdom in the foreseeable future. This may appear inconsistent with the fact that almost all current UK regulations stem from the existing EU body of law. But the UK authorities (including the Bank of England) have declined to commit to keeping that alignment intact.

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      The commission’s inclination to reduce EU dependence on the City of London is understandable. No comparable dependence on an offshore financial center has existed anywhere in recent financial history. Such dependence entails financial stability risk. In a crisis, UK authorities would not necessarily respond in a way that preserves vital EU interests. Think of the Icelandic crisis of 2008, when Reykjavik protected the failing banks’ domestic depositors but not foreign ones. It is hardly absurd for the European Union to try to reduce such a risk, even if — as appears to happen with derivatives — some of the activity migrates from the United Kingdom to the United States or other third countries as a consequence, and not to the European Union.

      At the same time, the argument that keeping EU liquidity pooled in London is more efficient than any alternative is unpersuasive given the European Union’s own vast size. In addition, the European Commission also follows mercantilist impulses to lure activity away from London, even though these generally do not make economic sense. Added up, these factors provide little incentive for the commission to grant equivalence status to more UK financial market segments, unless some other high-level political motives come into play. None are apparent right now.

      The UK Is Unlikely to Regain Lost Advantage

      How the European Union and the United Kingdom will decouple will not be uniform across all parts of the financial system. Regulatory competition between them may become a “race to the bottom” or “to the top,” depending on market segments and the circumstances of the moment, without a uniform pattern. In any case, such labels are more a matter of judgment in financial regulation than in, say, tax competition.

      In some areas, the European Union will be laxer, while in others, it will be the United Kingdom, as is presently the case between the EU and the US. For example, the European Union is more demanding than the United States on curbing bankers’ compensation but easier when it comes to enforcing securities laws or setting capital requirements for banks. At least some forthcoming UK financial regulatory decisions may be aimed at keeping or attracting financial institutions in London, but they are still not likely to offset the loss of passport to the EU single market.

      All these permutations suggest that the medium-term outlook for the City of London is unpromising, although the COVID-19 situation makes all quantitative observations more difficult to interpret. Once an onshore financial center for the entire EU single market, and a competitive offshore center for the rest of the world, the City has been reduced to an onshore center for the United Kingdom only and has become offshore for the European Union. That implies a different, in all likelihood less powerful, set of synergies across the City of London’s financial activities.

      The few relevant quantitative data points available reinforce this bleak view. Job offerings in British finance, as tracked by consultancy Morgan McKinley, have declined alarmingly since the 2016 Brexit referendum. The ECB (as bank supervisor) and national securities regulators coordinated by the European Securities and Markets Authority are tightening requirements for key personnel to reside mainly on EU territory rather than in the United Kingdom.

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      As noted by Financial Times columnist Simon Kuper, many financial firms’ Brexit policy until this year had been to “sit tight and do nothing until post-Brexit arrangements for finance forced [their] hand.” That phase has ended. Firms that drag their feet face regulatory disruption, as happened to broker TP ICAP in late January. Tussles between regulators and regulated entities, rather than between the European Commission and the UK government, are where most of the financial-sector Brexit action is likely to be in 2021. These disputes typically happen behind closed doors, and the regulators typically hold most of the cards.

      For all the optimistic talk in London of “Big Bang 2.0 or whatever,” the United Kingdom’s comparative advantage as the best location for financial business in the European time zone is unlikely to recover to its pre-Brexit level. The macroeconomic losses could be moderated or offset by cheaper currency and less expensive real estate in London, making the city a more attractive place to do nonfinancial business. Even so, a gap will likely remain for the UK government, which has for years depended heavily on financial sector–related tax revenue.

      The European Union stands to gain financial activity as a consequence of Brexit. How much and where is not clear yet. As some analysts had predicted, Amsterdam, Dublin, Frankfurt, Luxembourg and Paris are the leaders for the relocation of international (non-EU) firms. Dublin and Luxembourg specialize in asset management, Frankfurt in investment banking and Amsterdam in trading. But EU success in terms of financial services competitiveness and stability will depend on further market integration, the pace of which remains hard to predict.

      The European banking union is still only half-built because it lacks a consistent framework for bank crisis management and deposit insurance. The grand EU rhetoric on “capital markets union” has yielded little actual reform since its start in 2014. Events like the still-unfolding Wirecard saga may force additional steps toward market integration, even though a proactive approach would be preferable.

      The one near certainty is that London’s position in the European financial sector will be less than it used to be.

      *[This article was originally published by Bruegel and the Peterson Institute.]

      The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy. More